The legal structure of your club essentially means how your club is viewed in the eyes of the law and the legal obligations of your club and its members.
It is prudent for clubs to periodically review their legal form in order to ensure that they are operating the most appropriate structure for the nature of their operations. Considering the various options available can be time consuming and confusing, we have therefore produced a Guidance Note to help clubs through the process.
The potential exposure of your club to liability is likely to influence your decision on which legal structure you adopt. Our Liability Guidance for Unincorporated Clubs provides advice on the different types of liability a club may face.
An unincorporated club is formed when a group of people come together for the same purpose and determine to be bound by a set of rules, usually called a Constitution.
The Constitution will be the club's governing document and forms a contract between each and every member of the club. The law does not recognise an unincorporated club as a separate legal entity from its members, instead its legal identity exists in each and every member of the club jointly and severally.
Members of clubs are free to establish their own rules for the Constitution. To help clubs we have produced a RYA Model Constitution (together with Accompanying Guidance Notes) which may be a useful starting platform for you to build upon.
Because an unincorporated club does not have a separate legal existence it cannot hold property in its own name; it must therefore appoint trustees to hold legal ownership of property on trust for the beneficial ownership of the members of the club as a whole. We have produce guidance on the appointment, retirement and liability of trustees.
The Trust Registration Service
The Trust Registration Service (TRS) is a new legal requirement, applying to unincorporated sailing clubs which have their property/assets held by trustees from 1st September 2022. Unincorporated clubs will be required to register with TRS providing the appropriate information including details of the current trustees and secondly, to keep that information up to date.
We have produced detailed Guidance on the TRS which can be downloaded.
Scottish Register of Persons holding a Controlled Interest in Land
From the 1st April 2022, new legislation came into force which requires anyone who has a controlled interest in land to register on The Register of Persons Holding a Controlled Interest in Land (RCI). Unincorporated clubs within scope of the Regulations will be required to register on the RCI providing the required information and keep that information up to date.
It is applicable to Scotland only.
We have produced detailed Guidance on the RCI which can be downloaded here.
An incorporated company is recognised in law as having its own separate legal identity apart from its members. An incorporated club is governed by Companies Act legislation and there are specific legal requirements in relation to governance that a company must comply with.
If your club holds/owns property, employs staff or enters into contracts it may wish to consider adopting an incorporated structure as this will limit the liability of the club's members and prevent the directors / members from being held liable for claims against it (unless they have broken the law).
The Memorandum and Articles of Association will be the club's governing document and forms a contract between each and every member of the club. A standard Memorandum and Articles can be obtained direct from Companies House and clubs can instruct solicitors to draw them up on their behalf. To help clubs we have produced a RYA Model Memorandum and Articles of Association (together with Accompanying Guidance Notes) which may be a useful starting platform for you to build upon.
As the collective is often more powerful than the individual the RYA has developed the concept of Berth Holder Associations which encourages individuals to come together to represent the interest of marina based boat owners.
This section of the site therefore looks at the possibility of setting up a Berth Holder Association at marinas in the UK, explains how to get started and provides some useful template documentation. Berth Holder Associations can play an integral role in improving facilities and services at marinas.
Setting up a Berth Holder Association
Berth Holder Associations have been formed at many marinas around the UK. In addition to the important social side of their activities many of these groups have been successful in providing marina operators with suggestions and ideas for improving facilities and services.
Some examples of activities reported by Associations include:-
Stamp Duty Land Tax (SDLT) is payable where a chargeable land transaction occurs. Many unincorporated clubs hold land which, upon incorporation, would be transferred to the new incorporated club. Where the incorporated club is a charity, no SDLT is payable on the land transfer as there is usually an exemption available to charities. If the incorporated club is not a charity, the transfer may be caught by SDLT, even where the land is transferred for free. We have therefore produced Guidance on SDLT for clubs considering incorporation to help them determine whether they may be liable for SDLT.
There are many funding streams available, however, in many instances grant funders impose conditions. Our Funding Streams Common Constitutional Conditions Guidance Note sets out some of the common conditions that grant funders usually insist are contained within a club's Constitution or Memorandum and Articles of Association. Further information can be found by clicking on the following links
Code of Sports Governance and Sport England Grants
The Government’s strategy for an active nation 'Sporting Future' tasked UK Sport and Sport England with agreeing a new Code for Sports Governance, in order to protect the public’s investment into sport and maximise the effectiveness of those investments. The Code applies to all organisations within the United Kingdom to whom Sport England provides grant funding. Home Nation Sports Councils have their own governance frameworks in place.
Clubs that are considering applying for Sport England funding need to ensure that they are aware of the Code and will be able to comply with the conditions of the tier appropriate to the level of funding being sought, for the majority this will be tier 1.
We have produced written Guidance on Sport England Code for Sports Governance for clubs in relation to tier 1. In addition to the written guidance, we produced a webinar on the code conditions which is now available to watch on demand through the following link https://register.gotowebinar.com/recording/7948432629427201035
In order to support clubs applying for grants we have produced a Sources of Funding Guide and Guides on Sport England’s Small Grants and Community Asset Funds
There are two additional statuses available to clubs which provide tax relief benefits, namely: CASC status and Charitable status.
The Community Amateur Sports Club scheme was introduced in 2002 and enables amateur sports clubs to register with HMRC and benefit from tax reliefs such as Mandatory Rate Relief and Gift Aid.
Both our Model Constitution and Model Memorandum and Articles of Association incorporate provisions to assist clubs that wish to register as a CASC. It is important to bear in mind that a club's governing document is only part of the examination process, the CASC Unit will also look at the information contained on the CASC application form and in a club's accounts.
As part of its continued support for the CASC scheme the Sport and Recreation Alliance (SRA) has developed a CASC specific website www.cascinfo.co.uk which aims to be an interactive focal point for the scheme. The site is intended to provide clubs with information on the scheme and other fiscal issues affecting grassroots sport.
WARNING: It is important to point out that the CASC scheme is currently undergoing a consultation period for proposed changes to the scheme. This is causing delays in processing new applications and will have an impact on the criteria clubs will have to meet in order to become and retain CASC status. The proposed changes may well mean the scheme is no longer viable for some clubs.
HMRC consulted on the proposed changes in June 2013 and we have been heavily involved in continuing negotiations with HMRC since that time, details of which can be found within the Club Room section of our website.
The Charities Act 2006 recognises the 'advancement of amateur sport' as a charitable purpose; thus charitable status is open to sports clubs provided they can meet the conditions laid down in the Act.
The range of benefits available to a charity are wider than those available under the CASC scheme. However, the trade off for this was that historically (at least) charities were more regulated than CASCs (although with the proposed changes to the CASC scheme this distinction may no longer be so evident).
Charities are regulated by the Charity Commission and if your club takes on this status is will be necessary to ensure that you comply with charity law.
If you require further assistance please do not hesitate to contact the Legal Team Tel: 023 8060 4223 Email: email@example.com.